Problem

One of the most significant barriers to entry and adoption to DeFi is the over-collateralization. Today mainstream borrowers are either not using DeFi loans due to their unattractiveness as a financial tool comparing to TradFi ones or taking over-collateralized loans with unattractive collateral (>125%) and APR.

Banks, in their turn, overcomes this problem by hiring credit scores. Such tool may also be implemented in DeFi making crypto loans more accessible for fair users, cultivating trust and reputation culture. Moreover, credit score negatively impact the number of crypto fraud cases by disincentivizing actors to play dirty.

The problem that Nomis is going to solve is the over-collateralization in DeFi borrowing which is an entry- and adoption barrier for mainstream borrowers.

Solution

Nomis is an open-source protocol which helps on-chain developers both to build better DeFi products and use cases, and to balance already existing high-TVL protocols. Every lending/borrowing platform will be able to provide its end-users with extremely customized loan terms for borrowers by using Nomis API.

To predict the crypto borrower’s reliability on the basis of wallet’s data and transactions history, it’s proposed to hire a model of trained AI built on the hierarchy analysis and pairwise comparisons methods. This approach, from our point of view, is a balanced way of solving a quite difficult problem: credit decision forecasting with insufficient statistical data.

Nomis will help its partners to grow its TVL, MAU (as a result of acquisition of mainstream borrowers), MAD, # of on-chain use cases (as a result of opportunity provided to develop new DeFi solutions on-top of the Nomis open-source protocol).

Product Features

• Multi-chain scoring;
• Hierarchy analysis as a scoring method;
• Open source;
• Protocol and algorithm are designed to be governed by Nomis DAO.
  
  

Validation

The DeFi credit score idea is validated as our competitors, RociFi and TrueFi, successfully develop their own main products—credit protocols, on top of their own credit scoring algorithms. For example, according to Defillama, TrueFi had an over $0.5B TVL (incl. borrowed) in the pre-crisis period and ranked the 36th amongst DeFI protocols as of today.

Differentiation

Nomis’ competitors are other on-chain credit scores such as Chainscore (NEAR), RociFi (Polygon), Spectral Finance (Ethereum), Project Galaxy, Cred Protocol, and TrueFi (Multichain), etc.

Nomis brings two crucial competitive advantages to the table:

• Nomis is an open-source solution that helps web3 developers leverage credit scores building better on-chain products and communities.
• Nomis offers the most robust financial snapshot of a potential borrower hiring hierarchy analysis as a scoring method.

What's next for Nomis

As mentioned above, our goal is to allow one to borrow capital using one's on-chain reputation as a form of collateral (best case scenario), or at least provide better terms. Although, the long-term vision for Nomis goes far beyond credit scoring for DeFi: other dApps will be able to use existing Nomis Scores as well as building their own custom scores for any need (e.g. wallet qualifier for jobs applications, whitelists, special offerings for products, or just for inviting to a private party, etc.). In other words, our big-picture vision includes building the credential and identity infrastructure layer and empowering developers to build on top of it.

We plan to make Nomis self-sufficient by hiring one of the B2B or Web3 business models and GTMs.